British pensioners have won their campaign to prevent the Irish government plundering savings held in high-yielding bonds.
The Bank of Ireland (BoI) announced yesterday it had completed a €4.2bn (£3.6bn) capital raising to shore up its finances. The Irish government, which is a 15 per cent shareholder in the BoI, had threatened to confiscate £46m of bonds held largely by British pensioners to help the bank reach that €4.2bn target.
This proved to be unnecessary because enough senior bondholders agreed to sell their investments back at small discounts.
The British bonds were bought from the old Bristol & West building society, mainly by people approaching retirement in the 1990s, due to a 13.375 per cent annual payout that would top-up their pensions. But Bristol & West was bought by the BoI in 1997 and the bonds then came under the supervision of Irish regulators.
Mark Taber, who has headed the campaign against the BoI, said that he has obtained a legal opinion that the bonds should still be under British regulation. "Bondholders should never have been put in this position. When the dust settles, we will seek for these bonds to be pushed back into UK jurisdiction," he said.